Customer Engagement: The Key to Differentiation in Banking

Customer experience and customer engagement are often used synonymously in banking, but they are very different concepts. Both play a role in how a banking customer interacts with a financial institution. However, customer engagement provides more of a big-picture perspective critical to the modern banking industry.

The first half of 2022 has brought about worldwide challenges. Rising interest rates, inflation and the war in Ukraine have impacted global markets and created both fear and uncertainty. The University of Michigan’s U.S. consumer sentiment index fell drastically to a record low 50.2 in June of 2022 and consumers’ assessment of their personal financial situation declined by almost 20%.

As we navigate financial uncertainty and move further along the digital adoption curve, banking customers’ definition of what support from their financial institution looks like is changing. J.D. Power’s 2022 U.S. Retail Banking Satisfaction Survey found that “it’s no longer predominately about being fast, efficient, or convenient — it’s about supporting customers during challenging times.”

That means finding the right balance of convenience for common transactions and personalized service for problem resolution and financial guidance.

Customer Experience Vs. Customer Engagement

For many financial institutions, the common approach is to invest in point solutions such as live chat or video banking to achieve customer experience goals — e.g., customer demands for 24/7 digital support. But this misses the bigger picture of customer engagement. Customer experience (CX) and customer engagement (CE), two terms used interchangeably, differ quite drastically in meaning, in application, and in the results they deliver.

CX is transactional in nature and focused on a specific point-in-time interaction — such as ATM withdrawals, call center contacts, online banking transactions, and face-to-face meetings. CE, on the other hand, is the sum of many different customer experiences. Customer engagement is how financial institutions interact with their customers across all channels. It is CE, when done properly, that builds trust, loyalty and allows financial institutions to provide the service banking customers need and demand — not customer experience itself.

The Key Difference:

CX looks at how a consumer interacts with their banking provider in a single channel at a single point in time. Customer engagement looks at multiple customer experiences to find overlooked issues.

To build stronger relationships that support customers in these uncertain times, banking leaders must recognize the importance of a holistic customer experience strategy. A CE strategy keeps the customer at the center and ensures every interaction is not only easy, fast, consistent and convenient, but seamless in the channel(s) of their choice. This means empowering customers digitally when they want, easily connecting them to the right person and channel when needed and empowering the employee to best serve those customer needs efficiently and effectively.

The Power of Choice: The Key to Customer Satisfaction

Rivel recently released their Quarter 2, 2022 CXLign Banking Benchmarks report. Among other customer preferences and trends, they found that:

  • 62% of banking customers prefer digital banking to do common transactions (depositing a check, paying a bill, etc.)
  • 57% of banking customers prefer human assistance for more important transactions (sending a wire transfer, setting up a new account, etc.)

While the data may not be surprising, it does underscore a key consumer insight — people want choices. Some may prefer digital, some may prefer human assistance and those preferences may change based on the specific need on that day. The challenge is ensuring whichever channel they start in allows them to conveniently self-serve, research and connect with a specialist or get support and assistance when needed.

Optimize Self-Service: Give Consumers the Tools and Data They Need

Financial institutions have made tremendous investments in digital banking to empower customers to self-serve. As Rivel’s research highlights, 62% of consumers want to use self-service for common transactions. But the addition of each new digital banking feature brings with it an influx of questions — e.g., “How do I do this?” and “Where do I find that?”

Data from our customer self-service solution analyzing millions of banking interactions finds that customers at banks or credit unions with assets between $1 billion and $2 billion leverage support content on average 11,332 times each month across digital applications. The takeaway: Providing self-service tools is not enough — banking customers need contextual support and navigational beacons to find and use these tools to make self-service a reality.

To empower consumers to self-serve, financial institutions need to surround customers with contextual support via optimized search, on-page callouts, chatbots, and access in mobile banking. The contextual support not only acts as a navigational beacon, it provides answers to the common “how to” questions that occur most often digitally.

Optimize the Handoff Between Digital and Human Assistance

Today’s consumers rely on digital for a host of reasons beyond self-service. It could be to find contact information (phone number, location, hours), to research products and services, or to learn what to do in the event they need help (lost or stolen debit card, late payments). Optimizing these journeys is critical to connecting your customers to the right person the first time. Over the last few years digital customer support tools such as live chat, video banking, chatbots and online applications have become popular ways to provide digital support.

However, when done wrong, they create more confusion, more frustration, and lost opportunities. To avoid these pitfalls, financial institutions need to:

Provide customers with the right call to action based on the topic. For example, high-value topics like loans should have calls to action such as “Apply Online” or “Schedule an Appointment” — in person, over the phone, or with a virtual banker. Time sensitive issues should provide access to the right department instead of the generic 800 number or listing of your locations.

Leverage self-service to offload high-volume calls and live chats. Optimize your contact page with self-service knowledge that answers the common questions. Use a chatbot in front of live chat to answer the common questions and deflect live chats, freeing up your staff to interact with consumers who need human-assistance.

Support Your Customers in Uncertain Times

As we continue to navigate uncertain times, your customers’ needs will continue to evolve and their interactions with your bank or credit union — no matter how small or big — will shape their long-term perception. Customer engagement, and viewing the entire customer journey, will be the key to building trust, loyalty and long-term relationships. To truly deliver superior customer service and improve the metrics that matter (growth, efficiency, CX), financial institutions must adopt the holistic view that customer engagement provides:

  • Give customers choices — let customers choose how they want to interact; digitally, in-person, or any combination
  • Provide easy access to experts — easily connect them to the right person, in the right channel when help is needed
  • Empower frontline employees — empower your employees to be able to service customers quickly, efficiently, and effectively

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